The price elasticity of demand is typically expressed as a positive number because:
A. price and quantity move in the same direction.
B. the demand curve has a positive slope.
C. both the numerator and the denominator are negative, so the formula yields a positive number.
D. it's convenient to use absolute values.
Answer: D
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What will be an ideal response?
During the expansion phase of the business cycle
A) production increases. B) employment decreases. C) income decreases. D) unemployment increases.
Transfer payments include all of the following except
A. Social Security benefits for retirees. B. A church-run thrift store for the poor. C. Federal crop assistance for farmers. D. Government-subsidized loans for students.
The inefficiency of a sales tax on a good is ultimately the result of the
A) low tax revenue earned by the government relative to the cost of collection. B) wedge between what buyers pay for the good and what sellers receive for the good. C) buyers being unable to avoid paying the tax. D) sellers being unable to avoid paying the tax. E) increase in the consumer surplus that is more than offset by the decrease in the producer surplus.